Discount broking firm Zerodha said on Thursday it had applied for an asset management company (AMC) licence, which will permit it to build mutual fund products.
Nithin Kamath, founder and CEO of Zerodha, told ET that the application to markets regulator Securities and Exchange Board of India (Sebi) is aimed at building such products targeted at millenials, in order to fill a gap in India’s capital markets.
“Someone needs to rebuild mutual funds because the markets are not expanding and someone needs to take a shot at building mutual funds differently,” Kamath said. “We’ll continue distributing other people’s mutual funds. It’s a separate company that we’re setting up (for the AMC).”
Zerodha has applied for a sponsor licence through the broking entity. Once it is approved, the AMC will be set up, Kamath said.
Zerodha has “several ideas” on how to build mutual funds targeted at millenials, Kamath added, without disclosing specifics.
Zerodha currently allows customers to invest directly in mutual funds through its service, Coin.
The company is already the largest retail stockbroker in terms of clients, with 1.9 million account holders and 1.1 million active users who trade at least once a year.
Zerodha competes with players such as Paytm Money and ET Money.
ET Money is owned by Times Internet, part of the Times Group that also publishes this newspaper.
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